New Delhi: Telecom Minister Kapil Sibal on Thursday defended the poor response to the 2G spectrum auction, saying the government was not there to score points. “We are not here to score points. Our point always was that market dynamics should be allowed to play out. The moment you start dealing with market directly or indirectly then it will be bad,” he said.
He also added that the government should only intervene when required and the purpose of the government is to ensure development and to ensure prosperity. “We are not here to feel vindicated,” he said.
Poor response to the 2G telecom spectrum auction is likely to make it difficult for the government to keep in check fiscal deficit and meet the revised target of 5.3 per cent of the Gross Domestic Product (GDP) in 2012-13.
As against the target of Rs 40,000 crore, the 2G spectrum auction, which concluded on Wednesday, would fetch only Rs 9,407 crore. This was much less than the reserve price of Rs 28,000 crore fixed by the Telecommunications Ministry.
It is also unlikely that the entire amount would be available in the current fiscal as the telecom companies would have the option to stagger payment over three years. In view of rising oil and food subsidy bill and subdued revenue collection, the government had increased the fiscal deficit target for 2012-13 to 5.3 per cent from 5.1 per cent estimated in the budget.
This too now seems difficult in the backdrop of tepid response to 2G spectrum auction and the disinvestment plans which have so far remained a non-starter. As regards disinvestment, although the government has proposed to raise Rs 30,000 crore from stake sale in the state-owned enterprises, not a single PSU has hit the market in the first seven months of 2012-13.
(With additional inputs from PTI)